Explain how (i) open market operations (ii) reserve requirements and (iii) the discount rate can be used to stimulate spending in an economy in an attempt to boost economic growth.
Q: How does asymmetric information affect the process of transferring resources from surplus to deficit…
A: Asymmetric information: - It is a condition where one party involved in an economic transaction has…
Q: Which of the following is NOT a primary factor that influences the shape of the yield curve? a.…
A: The yield curve can be defined as a curve that shows how the yield on bond instruments - such as…
Q: Activities in financial markets have direct effects on individual wealth, the behavior of business,…
A: In the case of individuals' wealth real estate market also has a significant effect on an…
Q: Which of the following are stabilization policies and or tools? i) Change of government ministers…
A: Stabilizing policies can be either fiscal or monetary policy, fiscal policy related to the…
Q: if the federal government wants to stimulate a stagnating economy in a recession (increase…
A: Stagnating economy: - it is that economic condition in which there is low output in the economy.
Q: Which of the following is NOT true about the International Monetary Fund? The IMF makes loans in…
A: The 190 nations that make up the International Monetary Fund (IMF) strive for sustainable…
Q: Which of the following information is wrong? A) The constant decrease in the general level of prices…
A: The decline in price levels is called deflation whereas the decline in inflation rate is called…
Q: Which of the following was an underlying cause of the economic crisis of 2008? a. The imposition of…
A: Conventional lending standards had started to erode since the 1990s.
Q: If the Federal Reserve wants to set an interest rate that best promotes economic growth and new…
A: Answer - Need to find - factors should they consider Given in the question- If the Federal Reserve…
Q: Discuss the reasons for 2008 Global Mortgage Crisis. Please limit your report to no more than 300…
A: Financial deregulation was the root cause of the financial crisis. This allowed banks to trade hedge…
Q: explains in detail the role of the financial market and its influence for capital injection.
A: A capital injection is equity, cash or debt infusion into a company, project, or investment. The…
Q: Is either helicopter money or quantitative easing preferred in times of severe recessions in order…
A: Quantitative easing (QE) is a unconventional form of monetary policy where central bank of an…
Q: Discuss briefly whether zero interest rate policy is advantageous or disadvantageous to economy.
A: Zero interest rate lowers the cost of borrowing and people take more loans and as a result capital…
Q: Lower interest rates tend to lead to _______ spending by consumers and businesses, while higher…
A: Consumption spending and business spending depend on interest rates
Q: Explain how financial crises lead to a credit crunch and a recession
A: The financial crisis refers to the situation of failure of financial system of an economy due to any…
Q: The concept of flow of funds in an economy can also be used to understand the flow of funds in the…
A: In an economy, funds flow from those who have excess funds to those who are in need of funds. The…
Q: One of the tasks of a Financial System include providing affordable loans to all consumers and…
A: Allocation of savings into channels of investment in the economy is being done by the financial…
Q: Which of these is an example of asymmetric information in banking? a. Borrowers and lenders have…
A: Asymmetric information refers to a situation in which one party to a transaction has more…
Q: From our discussion of interest rate frameworks, we can guess that the demand for liquidity is…
A: Liquidity refers to the flow of money into the economy which increased when the banks lower the rate…
Q: The following graphs depict the market for loanable funds and the relationship between the real…
A: The equilibrium situation in the foreign exchange market is determined where the foreign exchange…
Q: During the 2007-2009 period, the US government made its most dramatic interventions in financial…
A: “Free and more flexible markets will still do more for the world economy than the heavy hand of…
Q: What does a downward yield curve says about the condition of the economy?
A: According to the given question Simply we can say that a downward yield curve or an inverted curve…
Q: From the IMF Working Paper about Global Financial Crisis briefly explain one of the alternatives: a)…
A: b)Financial integration and interconectedness To recover from global financial crisis,IMF has…
Q: Thinking about a bond, an economist would argue that it really is ... Group of answer choices 1. A…
A: When talking about bonds in economics, it is considered as a monetary instrument that is used to…
Q: __________ are an efficient and convenient way for governments and corporations to borrow large sums…
A: Stocks and bonds have an advantage over bank loans. This is because bank loans are less flexible and…
Q: An economy has a constant population. Everyone's demand for chequing deposits is5,000 goods in total…
A: Demand for checking deposit = 5,000 goods Total endowment = 10,000 goods Unintermediate capital =…
Q: How – through which macroeconomic channels do interest rates affect markets for goods and services?
A: The macro economic policy is a type of policy which changes the macroeconomic variables to influence…
Q: . Explain the term capital market and provide examples of this
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: ods in each period. Bank deposits are the only form of money in the economy. Deposits of banks are…
A: Given : demand for chequing deposits=5000 goods Total endowment=10000 goods total stock of…
Q: Is either helicopter money or quantitative easing preferred in times of severe recessions in order…
A: Helicopter money and quantitative easing are the two monetary policy concepts which can be used…
Q: Is this statement true or false? Please explain in detail why. Investing in development of people…
A: Concept: Investment in the development of people refers to the creation of human capital. It helps…
Q: a. government spending should increase or decrease? b. taxes should increase or decrease? c.…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Stricter capital and liquidity rules could lead to huge funding gaps , reducing lending , which…
A: The strict capital or the liquidity would result in the large differences in lending which would…
Q: For each of the following economic changes, predict what will happen to equilibrium interest rate…
A: Financial market equilibrium occurs when the money demand curve intersects the money supply curve or…
Q: Deindustrialization is a process whereby... A. State laws override Federal laws B. Federal laws…
A: Deindustrialization refers to the process by which manufacturing falls in a region or society as a…
Q: Institutions that help to channel funds from savers to borrowers are known as a) corporations. b)…
A: People do not consume their entire income rather they like to save a part of the income for future…
Q: The presence of a well developed financial market and a wide array of financial instruments is…
A: Financial instruments may be regarded of as capital bundles that can be traded or as assets that can…
Q: How should a yield curve look like in order for lenders to be encouraged to start lending again?
A: Yield curve: Yield curve is the graphical representation of different yield (interest rates) that a…
Q: An economy has a constant population. Everyone's demand for chequing deposits is5,000 goods in total…
A: A way of measuring the economic wellbeing of a nation, the GDP is the amalgamation of all the values…
Q: which of the following are true statements about another growth model - the Quantitative Theory of…
A: Richer warner presented the Quantity Theory of Credit in the month of April 1993, at the RES Annual…
Q: You are in charge of the Bank of Canada and economic indicators suggest that consumer spending and…
A: The important issue to highlight here is the consumer spending and short term debt. This means that…
Explain how (i) open market operations (ii) reserve requirements and (iii) the discount rate
can be used to stimulate spending in an economy in an attempt to boost
Step by step
Solved in 3 steps
- Read the following premise carefully and answer the questions specifically and in detail: "Financial institutions such as banks, mortgage companies and finance companies serve as intermediaries between those who have a surplus versus those who have a deficit creating a capital injection market." Explain in detail the function of the financial market and its influence on capital injection. Analyze the responsibility of the financial system in the demand for investment versus the supply of savings.Read the following premise carefully and answer the questions specifically and in detail: "Financial institutions such as banks, mortgage companies and finance companies serve as intermediaries between those who have a surplus versus those who have a deficit creating a capital injection market." Using the concepts of real interest rate and expected rate of return, he contrasts the relationship between savings and capital investment. Using the macroeconomic theory presented in the module content, he explains the relationship of the financial market with the economic growth of a country. Explain the dynamics that are expected to occur between different development policies in the injection of capital as instruments to promote growth, sustainability and economic stability of a country.It explains in detail the role of the financial market and its influence for capital injection.
- Read the following premise carefully and answer the questions specifically and in detail. You must answer the request with the correct information, showing that you understand and can properly apply the concepts. Try to address all the elements of each question and always express the answers in your own words. "Financial institutions such as banks, mortgage companies and finance companies serve as intermediaries between those with a surplus versus those with a deficit creating a market for capital injection." 1. Explain in detail the role of the financial market and its influence for capital injection.2. Analyze the responsibility of the financial system in the demand for investment versus the supply of savings.' Stricter capital and liquidity rules could lead to huge funding gaps , reducing lending , which could kill off economic recovery . Therefore , it is only right that amid growing concerns of another economic crash , financial institutions should be encouraged to lend out money as cheaply as possible to businesses and households . ' How far do you agree with the above statement ? Explain .i. When interest rates __________, the market required rates of return ________, and the bond prices will ________. j. If interest rates increase after a bond issue, the yield-to-maturity will ______,
- Discuss the role of banks as financial institutions that fuel the economic growth of a nation. Because corporations do not actually raise any funds in secondary markets, they are less important to the economy than primary markets.”In the Great Depression, countries with the worst contractions suffered ________ _____ Expansionary policies adopted to support elected officials in the next election can create a _________ _______ _____ In addition to bond prices, changes in interest rates affect what other asset prices? _______ _____ and ______Which of the following information is wrong?A) The constant decrease in the general level of prices is called disinfection.B) The combination of inflation and recession is called slumpflation.C) If the Marginal Tendency of Saving increases, the slope of the Total Expenditure Line increases.D) In an open economy, the sum of Marginal Savings Tendency and Marginal Import Tendency is less than 1.E) A liquidity trap is called the situation where nobody demands bonds because the bond prices are maximum and everyone prefers to wait in money at the minimum interest rate.
- F1. 1-While Fiscal policy shifts supply for loanable funds, monetary policy has a larger impact on the demand of loanable funds Select one : A False B. True 2-Laddered Strategy of bond investment involves estimating future cash outflows and then developing a bond portfolio that can generate sufficient coupon or principal payments to cover those outflows Select one: A- False B- True 3-Even though the Central Bank's objectives of high employment and economic growth are clos policies can be specifically aimed at encouraging economic growth by Select one : A- both A and B of the above B-encouraging people to save C- encouraging firms to invest. D- neither A nor B of the above. 4-The premium between low-quality corporate bonds and the government bondsthe Select one A significantly narrows B significantly widens C does not change D is reversedAccording to the theory of liquidity preference, aneconomy’s interest rate adjustsa. to balance the supply and demand for loanablefunds.b. to balance the supply and demand for money.c. one-for-one to changes in expected inflation.d. to equal the interest rate prevailing in worldfinancial markets.2. Explain how (i) open market operations (ii) reserve requirements and (iii) the discount rate can be used to stimulate spending in an economy in an attempt to boost economic growth.
